CBN Dismisses Reports on Reserves Decline, Reveals Strong External Buffers
The Central Bank of Nigeria has moved to calm concerns over the nation's external reserves, firmly dismissing reports of a decline and emphasizing that Nigeria's economic buffers remain robust and globally competitive. In a statement issued at the conclusion of the IMF/World Bank Spring Meetings in Washington DC, CBN Governor Olayemi Cardoso reassured investors and the public that fluctuations in reserves are normal and pose no risk to the country's economic stability.
External Reserves: A Solid Cushion Against Global Shocks
Cardoso disclosed that Nigeria's external reserves are currently above international benchmarks, providing a comfortable cushion against external shocks. He highlighted that the reserves can cover approximately 13 months of imports, which significantly exceeds the minimum threshold recommended by global financial institutions. "It is normal to see movements in reserves, and there is no cause for concern. We are in a very comfortable position relative to global benchmarks," Cardoso stated, underscoring the strength built through recent policy reforms.
Market-Driven Exchange Rate Enhances Resilience
The CBN boss pointed out that the structure of Nigeria's foreign exchange market has evolved, reducing the relevance of short-term reserve fluctuations compared to previous years. He noted that the market is now more liquid and market-driven, with less reliance on the apex bank. "Today, the market has greater liquidity, and investors can move in and out more freely," he explained, adding that the overall direction and strength of the system are more critical than temporary swings.
Reforms Paying Off, Says Finance Minister
In a related development, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, affirmed that Nigeria's reforms are durable and sustainable. He reported strong recognition and commendation from international bodies like the IMF and World Bank for the country's reform program. "These reforms have strengthened our economic fundamentals and restored confidence. They have also placed the country in a better position to withstand external shocks, including those arising from ongoing geopolitical tensions in the Middle East," Edun said.
He further explained that with the transition to market-reflective pricing for foreign exchange and petroleum products, the economy is adjusting smoothly without resorting to distortionary controls, unsustainable subsidies, or rapid depletion of reserves.
Naira's Performance and Volatility
Despite recent volatility, with the naira depreciating to N1,387 per dollar in March and rebounding to N1,342.50 per dollar in April 2026, Cardoso linked Nigeria's improved resilience to deliberate exchange rate and broader macroeconomic policy actions over the past two years. He stated that these measures have helped Nigeria absorb global shocks more effectively, with minimal impact during disruptions affecting other emerging markets.
Notably, the naira has staged a remarkable comeback in 2026, emerging as the second-best-performing African currency against the US dollar year-to-date, trailing only the Zambian kwacha. This unexpected strength has captured the attention of investors worldwide, according to market analysts.
In summary, the CBN's reassurances and the government's reform efforts highlight Nigeria's strengthened economic position, with robust external reserves serving as a key buffer against global volatility.
